Digital Pills: The New Value Add for Pharma

Introduction

Digital pills may sound extremely futuristic and novel, but the first digital pill dates back to 1957. This technology is essentially any ingestible sensor. The 1957 device used radio frequency to transmit biometrics such as temperature and pressure (Jacobson & Mackay, 1957). Now, modern-day digital pills used are accompanied by a medical drug to track adherence and facilitate delivery. Adding a drug component attracts participation from financially lucrative pharmaceutical companies. Many technologies within the biopharma space fail as they exist on the bleeding edge of their application. Living off investments and external funding to stay afloat can be cumbersome when a technology requires heavy upfront expenditure in research and development (R&D). The goal is to partner or be acquired by a large pharma company where they have the resources to invest in R&D and develop high-quality health applications. Pharma offers more stability in comparison to a private biotech company working alone.

Many digital pill companies have identified this and have structured their value propositions to attract pharma companies. As we will see in this report, targeting the immediate client isolation may be detrimental to the company. A biotech company that can identify all the key players involved from research to market access to healthcare providers to patients will be able to identify needs in the market and develop a high-value product.

Learning from Past Mistakes

Proteus was one of the first modern digital pill start-up companies to enter this space and gain large investor traction. Their technology, Abilify Mycite, was equipped with a sensor that was remotely interfaced with a skin patch to measure drug adherence in patients. They had partnered with Otsuka Pharmaceutical and raised $500 million dollars in investments (Belluck, 2017). Proteus seemed to be an extremely enticing and ambitious startup with high potential; but within a year, their employment dropped from 300 to a mere 93 and they filed for bankruptcy in 2020 (Reuter, 2020). This situation exemplifies a case where a company was unable to make the right strategic decisions to bring considerable value to patients and clients.

The generic drug, Abilify, is an antipsychotic used to treat schizophrenia and bipolar disorder. The generic drug typically costs between 600–800 USD (GoodRx) whereas this combination drug with the digital pill by Proteus reported cost upwards of $1,600 (Landi, 2020). Such a rise in drug pricing would deter many patients and make physicians reluctant to prescribe such a drug. Some observers attribute Proteus’ downfall to their high price point, others also suggest their chosen therapeutic area to target. Often patients with schizophrenia and similar mental health disorders experience paranoia and would be extremely avoidant of a “big brother” like pill that monitors use. Physicians would avoid adding this pressure on their patients and wouldn’t prescribe it to their patients either (Mesko, 2020). In addition, adherence as a use case can be challenged. Vasudev Bailey, Ph.D. partner at Artis Venture, had said, “Pharma cares about non-compliance, but why should patients care?” This leads us to question, even if Proteus used a better therapeutic area to target and made the drug affordable, would it still have failed? Could pharma convince patients of the value in measuring adherence? Is this the best way to measure adherence?

The Technology and Use Cases

Adherence

Adherence is an important issue as up to 50% of the time, patients fail to take their medication (Osterberg & Blaschke, 2005). Non-adherence can lead to disease progression, reduced functional abilities, lower quality of life, increased use of medical resources such as nursing homes, hospital visits, and hospital admissions (Sullivan et al., 1990; Col et al., 1990). Therefore, this topic is extremely valuable for pharmaceutical companies and healthcare providers (HCP) to improve patient outcomes.

A leading company in this area is EtectRx which uses a sensor receptor that can be worn around the neck whereas Proteus’ device required the patient to wear a patch on their skin. An area in which they excel is with administering HIV treatment. They have developed partnerships with Qualicaps®, Local Health, IncPear Therapeutics, and Brigham and Women’s Hospital but they have yet to partner with any pharmaceutical companies. The pharma industry may be hesitant to partner again with an adherence-based digital pill company after the unsuccessful journey with Proteus. Perhaps they also do not see the value from the end-user, the patient’s perspective.

There is also potential for a more simple, inexpensive tool to measure adherence. Many companies are now offering smart dispensers to address adherence issues. These medication containers or caps track each time it is opened or is locked unless it is time to take the drug. One example is Elucid Health’s Pill Connect which is a reusable cap that can be reattached to a new bottle and only unlocks and dispenses one pill per specified time. A wide range of other companies exist in this space too, including AdhereTech, Vitality, Pillsy, TimerCap iCap, Medikyu, DoseSmart, Intent Solutions TAD, Robrady, and many more. Due to this competitive environment, a digital pill for solely drug adherence may not expect much growth in the coming years.

Delivery

Larger molecules or biologics that cannot survive in the GI tract are typically injected into the patient, but digital pills may offer a new delivery method. Digital pills within this class will typically protect the medication in a polymer capsule equipped with a microneedle. Once the pill enters the stomach, the microneedle would release and administer the drug into the epithelial lining.

Earlier this year, scientists at MIT and Novo Nordisk developed such a device able to deliver up to 4-mg, reaching a bioavailability of up to 80% (Abramson et al., 2021). The narrow, heavy-bottomed pill shape is designed to orient itself to align the microneedle with the stomach lining. The needle is concealed by a sugar-based covering that dissolves in the stomach acid where it is dispensed.

Similarly, Lyndra Therapeutics, an off-shoot company from MIT, partnered with Gilead to study a slow-release capsule to decrease dosage frequency after Lyndra Therapeutics had completed their clinical phase 1 studies (Lyndra Therapeutics, 2021). Their current pipeline includes weekly schizophrenia and HIV treatments as well as biweekly Ivermecin and monthly oral contraceptive drugs yet to hit the market. (Lyndra Therapeutics, N.D.) This is accomplished by having a capsule that unfolds in the stomach into a star shape which is able to resist pressure to travel out of the stomach. This allows the device to stay within the stomach and control the release of the drug over a longer course (Anne Trafton, 2016).

SmartTab is an exciting company that is developing multiple digital pills for various applications. Similar to the above examples, their InjectTab replaces the need for large molecule and biologics injections by extending the digital pill’s microneedle once in the stomach to inject into the organ’s lining. They also have another technology, the TargetTab intended to travel to the colon and dispense medication there directly to hopefully decrease dosage and side effects while increasing patient outcomes. Many therapeutic areas involve the colon such as inflammatory bowel disease and Crohn’s Disease that may see a benefit from such a targeted administration. Their newest digital pill is the MultiTab that would sit in a patient’s stomach for a week to release medication each day. This would be beneficial for antibiotic treatment since it must be taken regularly at the same time. The digital pill could simply accomplish this after one-time ingestion. All of their technologies have completed pharmacokinetic pre-clinical animal testing (SmartTab, 2021; Lee, 2021)

One particular company that had been gaining quite a bit of notoriety on the stock market, Progenity, is also exploring this market opportunity. They originally offered genetic laboratory-developed test services and have recently shifted gears to focus on digital drug delivery systems in hopes of redeeming their popularity and gaining investors (Yu, 2021). Progenity was initially able to sell approximately 6.6 million shares priced at $15 per share through their initial public offering (IPO) in June 2020. Within a year, the share price dropped to a $4 share price when they were still focusing on laboratory diagnostics. The company has made the strategic decision to transition into the digital pill arena and “expect further improvement in operating expenditures as [they] continue to execute [their] transformation and focus on expediting the development of our gastrointestinal health and oral biotherapeutics programs,” explained Progenity CEO, Adi Mohanty. Their technology seeks to deliver medication precisely at the site of disease in the GI tract to increase efficacy and reduce systemic toxicity.

Regulatory Hurdles

Although I highlighted Proetus as a failure earlier, they did however succeed in one particular area, attaining FDA clearance for their novel technology. This was the first-ever digital pill to be cleared by the FDA which allowed etectRx to then gain clearance via the 510(k) pathway. The 510(k) enables applicants to move through the regulatory process much more swiftly than the Investigational New Drug (IND) application. It requires that the new product exhibits substantial equivalence to an already approved predicate product. In this case, etectRx’s ID-CAP was shown to be substantially equivalent to Proteus’ technology and was able to gain FDA clearance within a year of applying.

On the other hand, both of these technologies are intended to monitor drug adherence. For digital pill companies seeking to deliver drugs or For digital pill companies seeking to deliver drugs, they may have to apply for an IND application instead. Nonetheless, having already multiple digital pills cleared by the FDA minimizes the regulatory hurdle and presents a favourable market to enter as a biotech company. This can entice more start-up activity within this area or encourage current industry players to invest more in digital pills.

The Additional Value for Pharma

A drug patent in the US and Canada only lasts for 20 years. This doesn’t necessarily mean you have 20 years of market exclusivity. You want to obtain a patent late enough to maximize return on investment (ROI) but earlier enough to prevent losing the drug or technology to a competitor. This step usually takes place before clinical trials begin and some clinical trials can take over a decade to complete. Therefore, Pharma constantly finds itself in this race against the clock to enter the market and maximize the period of exclusivity before a generic drug company eats up a portion of the market.

There are ways to extend the life of your patent though. By changing the delivery method or pairing the medication with a device, you can add up to 15.2 additional years (Beall et al., 2016) of market exclusivity. This is especially prevalent in insulin medications (Kaplan & Beall, 2017). Although insulin was first clinically used 90 years ago, no generic option is currently available in the US (Luo & Kesselheim, 2015, Greene & Riggs, 2015). 53% of US insulin patents are actually linked to the delivery device rather than the insulin itself (Beran et al., 2016; Luo & Kesselheim, 2015). Big pharma companies are able to maintain exclusivity on insulin by renewing their patents on an accompanying medical device, typically an injection device.

Partnering or acquiring a digital pill delivery device would present a huge value add-on for pharmaceutical companies, especially for those with profitable medications nearing the end of their lifecycle. We can already see this interest with the MIT-Novo Nordisk and Lyndra Therapeutics-Gilead partnership studies. Pharma typically has the funds to invest in large-scale R&D which is ideal for start-up companies in biotech.

Conclusion

Adherence is a lower value application of this product. It is extremely valuable to pharmaceutical companies especially in regard to collecting real-world data, but many patients may not see the value in it. Furthermore, Adherence can be measured simply, cheaply, and non-invasively through smart containers. A company purely focused on this effort may struggle as more innovative, highly valuable digital pills enter the market.

Drug delivery digital pills speak more to the end-user, the patient. Having an efficient and easy-to-use administration method would be highly valuable to patients, especially when their only other option is to inject the drug themselves. These technologies would be extremely convenient to the patient; replacing an injection with a simple pill; taking a whole course of antibiotics via a one-time pill; decreasing dosage and side effects with targeted therapies. Below is a SWOT analysis for the digital pills intended for drug delivery.

SWOT analysis

Strengths — patient-centric solutions. Replacing injectables with a capsule that could potentially increase efficacy and reduce systemic toxicity at the convenience of both the patient and HCP, is a major strength. The potential for improving patient outcomes and treatment experience is immense with this technology

Weaknesses — regulatory process. For a delivery system digital pill, this use case may not constitute substantial equivalence to the predicate monitoring devices currently cleared by the FDA. Current drug delivery digital pill companies would probably need to go through the more lengthy Investigational New Drug application.

Opportunities — partnership with the financially lucrative pharma industry. This technology is of great interest to pharma as it can extend their patents and maintain market exclusivity. Even large generic drug companies may be interested in this technology to patent generic drugs accompanied by a digital pill to gain a competitive advantage.

Threats — competitive landscape. There are already many interested parties involved in this market segment which may pose a threat to staying competitive. The ideal company for pharma to partner with or acquire would be one that could address multiple issues. To have multiple use cases to have a single all-in-one solution provider such as SmartTab.

References

Abramson, A., Frederiksen, M.R., Vegge, A. et al. Oral delivery of systemic monoclonal antibodies, peptides and small molecules using gastric auto-injectors. Nat Biotechnol (2021). https://doi.org/10.1038/s41587-021-01024-0

Beall RF, Nickerson JW, Kaplan WA, Attaran A. Is Patent “Evergreening” Restricting Access to Medicine/Device Combination Products? PLoS ONE. 2016;11(2):e0148939. doi:10.1371/journal.pone.0148939.

Belluck, P. (2017). First Digital Pill Approved to Worries About Biomedical ‘Big Brother’. The New York Times. Accessed on Nov 29, 2021 from: https://www.nytimes.com/2017/11/13/health/digital-pill-fda.html

Beran D, Ewen M, Laing R. Constraints and challenges in access to insulin: a global perspective. Lancet Diabetes Endocrinol. 2016;4:275–85. Epub 2016 Feb 6.
Available at: http://dx.doi.org/10.1016/S2213-8587(15)00521-5}.

Col N, Fanale JE, Kronholm P (1990). Arch Intern Med.150(4):841–5.

Greene JA, Riggs KR. (2015). Why is there no generic insulin? Historical origins of a modern problem. N Engl J Med. 372: 1171

Jacobson, B., & Mackay, R.S. (1957). A pH-ENDORADIOSONDE (Preliminary Communication). The Lancet. 269(6981): 1224. DOI: https://doi.org/10.1016/S0140-6736(57)91792-0

Kaplan, W.A., Beall, R.F. The global intellectual property ecosystem for insulin and its public health implications: an observational study. J of Pharm Policy and Pract 10, 3 (2017). https://doi.org/10.1186/s40545-016-0072-8

Lee SN, Stork C, Wahl C, Singh S, Chuang E. Targeted delivery of soluble tofacitinib citrate to the site of inflammation to improve efficacy and safety. Poster presented at Digestive Disease Week virtual conference, May 2021.

Luo J, Kesselheim AS. Evolution of insulin patents and market exclusivities in the USA. Lancet Diabetes Endocrinol. 2015;3:835–7.

Lyndra Therapeutics. Lyndra Therapeutics presents promising phase 2 data on once-weekly oral risperidone treatment, LYN-005, in development for schizophrenia. News release. April 18, 2021. Accessed on Nov 29, 2021 at https://www.biospace.com/article/releases/lyndra-therapeutics-presents-promising-phase-2-data-on-once-weekly-oral-risperidone-treatment-lyn-005-in-development-for-schizophrenia/

Lyndra Therapeutics. LYNDRA’S PIPELINE. Accessed on Nov 29, 2021 at https://lyndra.com/our-science/

Mesko, B., (2020) The Present and Future of Digital Pills. The Medical Futurist. Accessed on Nov 29, 2021 from: https://medicalfuturist.com/the-present-and-future-of-digital-pills/

Osterberg, L., & Blaschke, T. (2005). Adherence to Medication. New England Journal of Medicine, 353(5), 487–497. https://doi.org/10.1056/NEJMra050100

Reuter, E., (2020). Proteus files for bankruptcy: Where did it falter?. MedCityNews. Accessed on Nov 29, 2021 at https://medcitynews.com/2020/06/proteus-files-for-bankruptcy-where-did-it-falter/

Sullivan S, Kreling D, Hazlet T. (1990). Noncompliance with medication regimens and subsequent hospitalizations: A literature analysis and cost of hospitalization estimate. J Res Pharmaceut Econ. 2:19–33

Trafton, A. (2016). New capsule achieves long-term drug delivery. MIT. Accessed on Nov 29, 2021 at https://news.mit.edu/2016/new-capsule-long-term-drug-delivery-malaria-1116

Yu, J., (2021). Progenity Stock is a Speculative Transformation Play. MarketBeat. Accessed on Nov 29, 2021 at https://www.marketbeat.com/originals/progenity-stock-is-a-speculative-transformation-play/